A Unique Acquisition Model, Where Local ODs Keep a Stake

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ASHBURN, Va. – Growing organically and with well-chosen local partners, Associates in Eyecare (AIE), a business group of optometrists in the D.C./Northern Virginia area, has been carefully building its presence, augmenting its doctors’ talents and equity stakes with professional operations managers in an approach that has enabled the group to grow to 10 practices today.

To hear some of the founding partners tell the story, AIE’s expansion has been fueled by a combination of factors. One is a common entrepreneurial spirit among its founding doctors, who brought their prior experiences to shape a new idea of how to run the business side of their practices while focusing on patient care. After establishing a broader foundation of offices was the vision to identify other optometrists in their nearby market area – some serving different demographics and patient bases – and with those office acquisitions give each optometrist a significant equity to work together with the executive partners to maximize systems and support with the flexibility to focus on their own practice specialties.

Drs. Rob Allen, Tiffany Lione and Hieu Vu-Gia all studied at Pennsylvania College of Optometry, and were friends in school, although graduating in different years. Dr. Allen in 1998, Vu-Gia in 1996 and Lione in 1997.

Each began to practice on separate paths. Dr. Allen, who today is CEO of Associates in Eyecare, originally bought a small practice, in Chantilly, Va. And then a second office in Ashburn, “working constantly,” he recalls.

Dr. Lione had been working as an associate at another practice in the area. Dr. Vu-Gia was a clinic director at a TLC laser center in Tyson’s Corner. Drs. Lione and Vu-Gia had talked about options with Dr. Allen of Ashburn Eyecare Associates, and they started the Stone Ridge office in 2004. Dr. Paul Colbourne joined Stone Ridge in 2005 and became a partner in 2007. The team then opened the Oakton location in 2010. In 2015, another doctor approached the team to start a new office. And just after that, in December 2015, was when the group started office acquisitions. Those doctors were not offered equity in the total group, but they would be acquired and keep a stake in their office. Today AIE has four executive partners, Dr. Allen as CEO, Dr. Lione as president, Dr. Vu-Gia as vice president and Dr. Colbourne as secretary.

“We envisioned additional offices where each had an optometrist who would be an equity partner, so that everyone’s commitment was not only professional but personal, with a financial incentive to succeed,” Lione explained. “As executive partners, the four of us make decisions together. But the other offices’ equity partner/doctor also each have a voice.”

Kyle Bigos, now COO for the group, said there were a total of nine office locations in 2017, seven in Northern Virginia and two in Washington, D.C. Even though there are seven different legal entities for these nine locations, they all operate under the “Associates in Eyecare – Optometrists” framework. “There is an onboarding process and timeline specifically designed for each new M&A office and we devote our resources to the items that require the most immediate attention and can have the biggest impact on the practice’s organic growth. This might be helping improve operational efficiencies, COG analysis and economies of scale, removing operational items from the managing partners’ plate so they can focus on seeing patients and generating more revenue,” Bigos said.

In calendar year 2017, AIE’s group revenue was $14.5 million. A 10th office was brought into the group in March. Dr. Allen noted, “At one time in our field, the traditional thinking for a private practice OD was to expand to another office, hire a great manager, hire a doctor and run from there. But that approach doesn’t always work today. A doctor with a meaningful equity stake has every incentive to get things done.”

Associates in Eyecare offices don’t emphasize common branding, per se. The offices operate in diverse areas, and the doctors have their own focuses. There are some co-logo-ing on business cards and some in-office signage and on the website. But there are, behind the scenes, other activities to help offices operate more efficiently. “It’s a goal to use a common EHR and this will be put into place gradually,” Lione said. “It’s important to note that we have a strong medical model in all our practices. Our doctors are highly trained, focusing on specialty contacts, ortho-K, glaucoma, great technology in their offices for comprehensive care. This is their choice, we can be flexible in that way.”

Associates in Eyecare has been moving forward steadily and carefully. One observer is Wolfgang Tolle, now on AIE’s board, a long-time ophthalmic executive with such firms as Alcon, Wavelight and, currently, Vision Care Technologies. “Dr. Allen has been my eye doctor for more than 10 years, and, aside from being a very satisfied patient, I’d been seeing what he and his partners had done with the group. He spoke to me to join them on their board and advise them on acquisitions, financing and operational or strategic issues.”

“Generally,” Tolle observed, “there’s a lot of consolidation going on in the OD space, in the MD space. There is a lot of money chasing opportunities out there, and much of it is private equity-driven – not just in vision care, but in all fields. We’ve seen this group become centered, with optometry offices coming on in a more methodical way, with each becoming an equity partner, giving each partner some of the latitude that they’d like to practice, but each one having a voice. Dr. Allen and his group are taking a patient-centric focus. They have a clear view of a medically-driven approach to patient care, while being sensitive to what each office needs, and offering flexibility to the operation, along with economies of scale.”

Dr. Allen told VM, “When we started out, in the late ‘90s and early 2000’s, the penetration of managed care was pretty complete, but online selling wasn’t as pronounced as it is today, online selling really didn’t exist – 1-800 CONTACTS existed mostly on the phone. But regulations out of Washington changed, credit was harder to get and optometry students’ loans and debt are now double what they were when we graduated.

“So-called cold starts are much more difficult for sure,” he continued. “Today, the best independent docs, with the best support, can still have a tough time especially in metro areas, or, even in rural areas, where the economics can be different.”

Said Dr. Lione, “We had some ideas for our goals, but we didn’t sit here and sketch this all out. We’re taking things in and changing as we need to. We’re looking to partner with the best practices in the DC Metro, continue to grow in the Mid-Atlantic and take our time. We’ve been approached by people with practices as far away as Massachusetts and Georgia, but we want to do what makes sense, seek like-minded doctors and build as we go.”

Dr. Allen also noted that the group holds monthly doctor meetings. “All the doctors from each practice take part. It’s fun [and] we’re friends, but we know why we’re there. As executive partners, we make sure these are well run and informative. I’m extremely lucky. I’ve got the best partners in the world, we’re like-minded.”

He added, “We can work with ODs at any phase of their career who are looking for the support and infrastructure of a larger group. That’s what we bring. Throughout it all, we see our approach as one that preserves independent optometry practice.”